Employment & Industrial Relations Newsletter, May 2013

Posted on: 22 May, 2013 |
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Welcome

In this newsletter we have considered a case of 'genuine
redundancy' where the employer was required to do more than merely
give sound reasons, as well as a case that considers what
alternative employment an employer must provide in order to pay a
reduced redundancy payment to an employee. We have also highlighted
a number of 'access to justice' initiatives launched by the Fair
Work Commission.

Our next HR forum is on the subject of 'Employment Contracts and
Policies' and will take place on 30 May 2013. Anyone interested in
attending this free forum is encouraged to respond early.

We have introduced a new section, cases
roundup, which provides a snapshot of recent interesting
cases in the E&IR area. We welcome any feedback you have on
this newsletter. Please contact any member of our E&IR team if
there are sections you would like to see included.

April at a glance

The Fair Work Commission full bench handed down a decision
regarding award flexibility clauses. Among the changes, the
standard clause will be varied so that an individual flexibility
arrangement (IFA) cannot be entered into before
the individual employee has commenced employment. For an
explanation of this decision, see our earlier alert.

With effect from April 12, the Federal Magistrates Court of
Australia is now known as the Federal Circuit Court of Australia
and its members are now called judges.

In safety news, Safe Work Australia has published two new
guides on workplace exposure standards for airborne contaminates
and the prevention of workplace cyanide poisoning.

WorkSafe Victoria has published a new poster on manual
handling, which can be accessed here.

Manual handling is the biggest cause of
workplace injury in Victoria. Hazardous manual handling can lead to
serious musculoskeletal injuries, which can be debilitating and
severely affect a person's quality of life.

Budget announced - employment & workplace relations
measures

The government will give the Fair Work Commission
(Commission) an additional $46.2 million over the
next four years to fund its proposed new powers to deal with
workplace bullying and to establish a Pay Equity Unit.

The Office of the Fair Work Ombudsman is also due to receive an
additional $25.7 million of funding over the next four years to
provide compliance, education and advisory services in support of
the national workplace relations system.

However, the spending measures have come at a cost to the Fair
Work Building Inspectorate, with a $6 million annual cut in
funding.

A number of other significant spending measures were announced
in the recently released 2013-14 Budget, as summarised below:

457 visas

The government is committing $3.4 million over the next four
years to enable the Fair Work Ombudsman to monitor and enforce
employer compliance with 457 visa conditions.

The cost of the visa application charge for the 457 visa will
rise to $900 from 1 July 2013.

Award modernisation

Employer and employee peak bodies are expected to receive $4
million from the government over the next two years for grants to
help them participate in the award modernisation process.

Asbestos

The government is proposing to establish an agency responsible
for coordinating the implementation of a national strategic plan to
improve asbestos management and awareness in Australia, known as
the Asbestos Safety and Eradication Agency. The Agency will
commence from July 1 this year at a cost of $10.5 million over four
years.

Budget reply

In its budget reply speech, the opposition announced that, if
elected, it will delay for two years the timetable for increasing
employer super contributions from 9% to 12%. Note that 1 July's
increase to 9.25% is unaffected by this announcement.

The opposition has also promised to re-establish the Australian
Building and Construction Commission and 'return the workplace
relations pendulum to the sensible centre, under the existing Fair
Work Act, with fairer rules for right of entry and for new
projects'.

Cornwall Stodart joins FWC pro bono representation program

The Fair Work Commission (FWC orCommission) has introduced new measures to assist
self-represented parties who appear before the Commission,
including a pro bono legal scheme for self-represented parties
involved in unfair dismissal jurisdictional hearings. Cornwall
Stodart was invited to participate in the program, which matches
'eligible self-represented parties with pro bono legal
services'.

The program has been established to provide appropriate and
timely legal advice to self-represented litigants as well as to
promote efficiency by focusing the proceedings on the real issues
in dispute, thereby ensuring hearings are conducted efficiently and
costs are kept to a minimum.

Cases roundup

Worker's PTSD claim was full of 'croc'

A worker attacked by a crocodile and then accidentally shot by a
co-worker (who was trying to help him) has been denied workers'
compensation for post-traumatic stress disorder
(PTSD) and other injuries. The Darwin Magistrates
Court found that there was a 'conspicuous absence' of medical
evidence supporting the worker's claim of pain and nerve damage,
and his Honour was not satisfied that the worker had PTSD (despite
acknowledging that the event had involved 'actual or threatened
death or serious injury'). His Honour said there were a number of
inconsistencies with his claim for PTSD, including that the worker,
who was collecting crocodile eggs when he was attacked, had
continued to work closely with crocodiles.

Puddle injury costs employer $1.3 million

In a case that makes you rethink the old adage about jumping
puddles, the New South Wales Supreme Court has awarded over $1.3
million in damages to a worker who was injured when she took a
foreseeable, but low, risk in attempting to step across a puddle to
access her workplace. The worker claimed she was permanently unfit
for all forms of work following her injury. As the employer had
been aware of the hazard for months and had taken no steps to
address it, the court awarded the hefty damages payout.

The benefit of hindsight

The Queensland Supreme Court has rejected an employee's $1.1
million damages claim. The court ruled that the employer who
inspected the ladder (and found it was safe and secure) immediately
before it broke and injured the employee was not liable for his
injuries, stating that the absence of regular inspections was
irrelevant if an inspection immediately prior to the incident did
not disclose any untoward risks. In determining whether the
employer had breached its duty, the court said that
'reasonableness' must be considered without the benefit of
hindsight.

Drug test sacking upheld

A worker whose employment was terminated after he refused to
provide a urine sample for a random drug and alcohol test has lost
his unfair dismissal claim, despite offering a saliva sample
instead. The worker refused to give the urine sample, arguing that
he had 'a right to decline to engage with any workplace policy'
which used a method that was not 'best practice'. The Fair Work
Commission found the employer was entitled to dismiss the worker
for failing to follow a lawful and reasonable direction to undergo
the urine drug and alcohol test. It said the policy was not
unreasonable simply because the employer could have adopted the
employee's preferred approach to testing.

'Ur fired' - the inappropriateness of dismissal via
text

The Fair Work Commission (Commission) has once
again been asked to rule on the fairness of a text message
dismissal. The Commission has on the rare occasion found a
dismissal via text message was not unfair. However, recent cases
seem to be indicating a trend towards the idea that text message
dismissals are presumptively unfair (and it is up to an employer to
show that it was fair in the circumstances). In this case, the
Commission berated the employer for 'one of the worst unfair
dismissals on record' when it terminated an employee with 19 years'
service via text. The employer also failed to pay out the part-time
worker's accrued entitlements to annual leave, pro rata long
service and payment in lieu of notice, as well as five weeks'
unpaid wages.

The Commission has reiterated its warning that if dismissal is
implemented by any means other than face-to-face communication,
'both the legal and ethical basis for the decision to dismiss is
likely to face strong and successful challenge'. The reason for
this is that text message removes one of the basic elements of
procedural fairness from the process - that is, the right to be
heard. Unless there is a genuine threat of violence, employers
should ensure that dismissals involve face-to-face
communication.

The employer is being given an opportunity to make submissions
in response to the worker's preferred remedy, being
reinstatement.

Fair Work Ombudsman (FWO) 'misleading' media
release

The Federal Circuit Court has taken into account 'misleading'
media releases issued by the FWO which suggested that the FWO was
'prosecuting' a company and its director when imposing a penalty on
the company and its director for underpaying a casual employee more
than $19,000. The court said it was open to infer that criminal
proceedings were being launched against the parties, when in fact,
the proceedings commenced were for the imposition of a civil
penalty. Judge Michael Jarrett also said that although the company
had committed to pay any shortfall of the wages owed to the
employee, the medial releases contained no reference to this.

The parties were ordered to pay $42,000 and $10,560 respectively
for the breaches, in addition to rectifying the underpayments.

Executive who refused to 'go quietly'

The NSW Supreme Court has ordered a company to pay $268,000 in
damages to its former senior advertising executive who refused to
'go quietly' after the company hired a new senior executive to
effectively take over his role and responsibilities. The court
warned that a 'significant diminution in remuneration, status or
responsibility' might constitute repudiation of the contract if the
facts of a case support such a finding. In this case, the court
held that the company had repudiated the executive's contract of
employment when its management informed the executive that he would
no longer be the 'ultimate creative head' (a role he had filled for
several years). The award of damages included the salary he would
have earned during the contract's nine-month notice period.

$100,000 discrimination payout

An employer, found to have discriminated against an employee for
caring for his terminally ill partner, was ordered to pay the
employee more than $100,000 in compensation and interest (including
an award of $10,000 for aggravated damages) for contraventions of
federal equal opportunity laws.

'Genuine redundancy' requires consultation as well as sound
reasons

The Fair Work Commission (Commission) has
ordered an IT company to pay $10,000 to a former operations manager
even though he was dismissed for 'sound, defensible and
well-founded reasons'.

The manager claimed his dismissal was unfair. However, the
company argued that the manager's dismissal was not unfair because
his employment was terminated due to a genuine
redundancy.

However, the Commission determined that it was not a genuine
redundancy because the company had failed to comply with its
obligations to consult with its employee prior to making the final
decision to terminate employment.

The Fair Work Act 2009 (Cth) (Act)
provides that employers must comply with any consultation
obligation in a modern award or enterprise agreement in order to
rely on the genuine redundancy defence to an unfair dismissal. The
Professional Employees Award 2010, which applied to the manager's
employment, contained consultation obligations that were triggered
by a decision to make the manager's position redundant.
Commissioner Roe suggested that if consultation had occurred,
redeployment options may have arisen or the parties may have agreed
on a productive way for the manager's job to continue without the
need for redundancy.

The former manager was entitled to a month's lost earnings,
which amounted to $10,829.70.

Employers must follow any consultation requirements in the
modern award, enterprise agreement or other industrial instrument
that applies before they will be entitled to rely on the defence of
genuine redundancy.

Employers must offer alternative employment comparable to the
former position

The Fair Work Commission (Commission) has
offered further insight into the term 'acceptable employment'.

Under the Act, an employer may apply to the Commission for a
reduction in the amount of redundancy pay where the employer
obtains other acceptable employment for a worker whose employment
has been terminated.

In this case, the employer sought to vary the redundancy
payments payable to a housekeeping supervisor on termination of her
employment on the ground that she had refused the alternative
employment offered.

The former housekeeping supervisor's employment was terminated
after her employer outsourced the housekeeping function to a
contract cleaning company. The worker was then offered a position
as a housekeeping attendant with the contract cleaning company, for
which her award rate of pay would be substantially less per hour.
She refused this alternative employment.

The critical question was whether there had been an offer of
acceptable alternative employment. The Commission found that the
test is not whether the worker could carry out the new employment;
rather, the test is whether the alternative employment is on terms
and conditions 'no less favourable' than the terms and conditions
enjoyed immediately before the worker's employment was terminated.
The Commission considered that the alternative employment should be
comparable to the former position in terms of remuneration,
location and the kind of work.

The Commission found that the alternative employment offered was
not 'acceptable' within the meaning of the Act because of the
significant reduction in salary.

The worker was awarded her full redundancy entitlement.

Employers should note that whether a job is 'acceptable
employment' will depend on a range of factors, such as pay, hours
of work, employment category, seniority or status, skills and
qualifications, location, job security, as well as other fringe
benefits. We recommend you seek advice on whether redundancy is
payable in situations involving alternative employment
opportunities.

Watch this space

Attorney-General Robert Clark has introduced legislation into
parliament that abolishes all remaining suspended sentences in
Victoria. The Supreme and County Courts will not be able to order
suspended sentences from 1 December 2013, with the Magistrates
Court following suit by September 2014. This will be significant,
particularly because suspended sentences are often used with
workers convicted of workers' compensation fraud.

The High Court has granted Comcare special leave to appeal
against a full Federal Court decision in favour of the commonwealth
employee who sustained sex-related injuries while on a work trip.
The court is being asked to rule on the boundaries between private
and business activities during work trips and will hear the appeal
in August.

The Senate Inquiry into the Fair Work Amendment Bill 2013 is due
to release its report this month. Over 50 submissions were made on
the Bill, which among other things, if passed allows those who
believe they are being bullied at work to seek a stop-bullying
order from the Fair Work Commission, with the Commission required
to begin dealing with the complaint within 14 days.

International Workers' Memorial Day (also known as the World Day
for Safety and Health at Work) was observed in Australia on Sunday
28 April 2013. Unions used the day to renew calls for
Australia-wide industrial manslaughter laws. While it remains
unlikely that such laws will be enacted, it is a timely reminder to
all employers to update their occupational health and safety
processes regularly.

Across Australia, there were 192 people fatally injured at work
during 2012. In the year to date, a further 59 people have lost
their lives at work.

Businesses are also encouraged to attend Safe Work Australia's
free training and information sessions being held across the
country on the 'Globally Harmonised System of Classification and
Labelling of Chemicals' (GHS). Manufacturers,
importers and suppliers of 'substances, mixtures and articles', as
well as other businesses and workers dealing with hazardous
chemicals, have until 31 December 2016 to fully transition to the
GHS.

The Queensland government has introduced a new Bill into
parliament, which if passed, will entitle fewer workers to
compensation by replacing the current broad definition of a
'worker' in the Workers' Compensation and Rehabilitation Act
2003.